The latest residential property auctions monitored by interest.co.nz saw a pick up in activity, but the sales rate has remained at 30% for the last three weeks.
Interest.co.nz monitored 375 auctions over the week of 18-24 May, up from 315 the previous week and 296 the week before that.
Of the 375 properties auctioned, 113 were sold under the hammer, giving an overall sales rate of 30%, which was unchanged from the previous three weeks.
That suggests a sales rate of just under a third is the current norm.
Sales were particularly weak in Auckland, where just 27% of the properties that were auctioned sold under the hammer, down from 31% the previous week.
Auctions sales remain particularly strong in Gisborne, Canterbury and Queenstown, although even they have dropped back from the highs being achieved a couple of months ago.
Overall, the latest results suggest there are plenty of homes coming up for auction, but sales remain sluggish.
The table below shows the latest results by district.
Details of the individual properties offered at the auctions monitored by interest.co.nz, including the prices achieved for those that sold, are available on our Residential Auction Results page.
The comment stream on this article is now closed.
•You can have articles like this delivered directly to your inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, register here (it's free) and when approved you can select any of our free email newsletters.
168 Comments
Property has once again proven how notoriously illiquid it can be on the ride down. Why would the next person want to risk becoming a bag holder? It's big discounts and quality that will now entice buyers to sign. Vendors are now beginning to run after scant buyers. This is the reset we needed to have. I for one won't be surprised, that come end of 2025, prices are back to where they were 10 years earlier.
I very much doubt Speculords envisaged being exposed to rampant insurance and rates increases in later years and on a declining asset too. Many will be thinking it's now exit time.
We will wait and see. If you are correct, I will congratulate you, if you are wrong, what will you have to say?
I don't post here to be congratulated. It's not a competition....
I get the feeling you do, from your comments it seems like you are a disgruntled retired poppy
Oh my Lord - here's another one. Doesn't like what he reads! It's just a forum....
Just get tired of the negativity. No wonder we have a mental health crisis.
You can think of it as negativity but it’s actually a lesson in finance and economics. It’s simple a massive experiment based on new policy that has unfortunately gone wrong.
It not about being negative, it’s about being rational and thinking of outcomes.
It all depends what side of the fence you’re viewing RP’s comments from:
- If you’re over-leveraged in property debt, then you’d certainly perceive it as “negativity”
- If you’re not over-leveraged in property debt, you'd likely perceive it as a logical probability that's worth discussing
And worth celebrating
Nicely put... isn't it weird how the highly leveraged used to be here waiving their flags.. now they are shooting those who are trying to make a point
Don't you get it... they don't want to be told the truth
YourPointIs... Nothing
Ohhh, subtle, and so creative!
By and large, people who have bought into the property market don't regret it. People seldom (if ever) come here saying that buying property was a big mistake for them - and that they aspire to go back to renting, or return home to live with Mum and Dad (or whatever).
Rather, the people who come here bad-mouthing the housing market are the usual suspects - well-known for their pervasive negative/pessimistic mindsets. Forever and always, they tell us to stay clear of property because the property market is about to crash. And they lose.
Nonetheless, I am concerned about over-indebtedness. As a rule, no central bank or government should encourage (or facilitate) people to live beyond their means. And neither should it happen nationally. Over-spending can put the economy at risk and seriously harm the country's social fabric. Those individuals who have got themselves donkey-deep in debt are a menace to themselves and others. (Inevitably, there are far-reaching ripple effects.)
That's why I support RBNZ with its "higher for longer" interest rate policy. Strong medicine is now appropriate - and for an extended period - to make people learn and to discourage/prevent them from their own worst excesses. Part and parcel of maintaining economic stability is keeping inflation within reasonable limits...... Let's not forget the impact of high inflation (including galloping house prices). If the RBNZ chooses to raise the OCR further in the next year or so, then so be it.
TTP
Nobody comments on a financial website about their regret purchasing property, so that speaks for the whole nation? Nobody, no regret, but you're concerned for them? How noble. Must be getting hard twisting yourself through the spruiker hoops these days.
If people were upset about their previous property purchases then, for sure, we'd hear all about it on this forum...... But, the reality is, we don't.
TTP
We’ve heard a whole lot of complaints about low yield, high rates, policy changes. All after purchasing property. There’s a lot of pain out there right now, if you were so concerned you’d see it.
Cheers, Noone.
Tothepoint, oh so NOW you're concerned about over indebtedness? Pull the other one. It was you that posted the following comment right at the height of stupidity;
by tothepoint | 3rd Sep 21, 8:39pm - "NZ house prices are increasing - on a sustainable long-term trajectory"
Like others here, I wholeheartedly support home ownership but not to the point of sacrificing ones emotional and financial well-being. The bank is then no better than your average heartless Property Broker.
As you well know, Retired-Poppy, I have posted many times about the perils of over-indebtedness. It remains a concern of mine. [Edited from original.]
Yes - in the long-term house prices have been - and will continue - increasing. (The long-term trajectory for the property market remains very good, especially given NZ's reputation as a country of choice and the overwhelming demand from those abroad to live here.)
Along the way, there are ups-and-downs in the property cycle but the track-record shows, convincingly, that property owners sustain sizeable net benefits over time.
Retired-poppy: you neither recognise/acknowledge property cycles - nor the real (rental) income derived from property. These failings heavily discredit you. You have never foreseen/acknowledged an increase in house prices or rents - despite them rising through most of the time you've been coming here.
Further, you fail to recognise the all-important intangible (non-financial) benefits from owning property - such as security, independence (from landlords) and the flexibility to do what you choose with the property....... As well, you fail to recognise the sense of pride/achievement/success from owning one's own home - which FHBs and their parents often refer to.
You don't listen and you don't learn. The reality that the vast majority of property owners are very content with their circumstances is, clearly, something that haunts you - especially given that you have strenuously advised against buying property through all the years you've been coming here.
TTP
Surely that's not a genuine statement but yet another trolling comment??
Nonetheless, I am concerned about over-indebtedness. As a rule, no central bank or government should encourage (or facilitate) people to live beyond their means. And neither should it happen nationally. Over-spending can put the economy at risk and seriously harm the country's social fabric. Those people who have got themselves donkey-deep in debt are a menace to themselves and others. (Inevitably, there are widespread ripple effects.)
So when people like you champion ever increasing house prices Tim you can't see the connection between "donkey-deep debt", "galloping house prices" and "economic stability", particularly for people that just want/need a home for their own stability in life much like you encourage? Now you're saying strong medicine is required for those same people? Wouldn't the easier solution be to prevent the economy from requiring said medicine in the first place?
Nonetheless, I am concerned about over-indebtedness. As a rule, no central bank or government should encourage (or facilitate) people to live beyond their means.
That's why I support RBNZ with its "higher for longer" interest rate policy. Strong medicine is now required - and for an extended period - to make people learn and to discourage/prevent them from their own worst excesses.
by tothepoint | 15th Nov 22, 1:18pm
Unsurprisingly, there's increasing speculation from well-informed individuals that house prices will find a footing before much longer. Mortgage interest rates may well be near their peak.
The current downswing in the housing market is not nearly as sinister as some here would have us believe....... 2022 may well go down in history as the year of the "short and shallow" correction. ✅
TTP
by tothepoint | 1st Nov 21, 6:27pm
Wellington and Auckland remain excellent choices for property investors.
But don’t dismiss the provincial cities - especially progressive centres such as Palmerston North. Well-located sections in PN are fetching premium prices - such is their scarcity. That’s an indication that PN house prices will continue rising.
TTP
You're a snake in the grass Tim.
Retired-poppy: your failings are many and varied....... And that also applies to "Snow" (above and below). [Edited since original post.]
Sadly, many of them stem from the obvious: you simply don't understand property cycles - and completely avoid distinguishing between short-term and long-term effects.
So what we get from you is a mishmash of misleading and deceptive comments, punctuated with out-of-context quotes.
Your posts here remind bring to mind the time-honoured wisdom, "Empty kerosene vessels make the most noise".
TTP
FHB's, this be a timely reminder that due to toughening economic conditions, fraud and deceit are becoming increasingly anxious for your money. Remain informed and be prudent.
Anything to say regards these failings?
https://www.nzherald.co.nz/business/property-brokers-and-director-order…
thanks for posting this link
Yet another troll comment or do you have no self-awareness?
Nonetheless, I am concerned about over-indebtedness. As a rule, no central bank or government should encourage (or facilitate) people to live beyond their means.
That's why I support RBNZ with its "higher for longer" interest rate policy. Strong medicine is now required - and for an extended period - to make people learn and to discourage/prevent them from their own worst excesses.
You encourage potential buyers to concentrate on the long term positives regarding property ownership even at peak stupid a couple of years ago (while trying to downplay any possibility of a market crash). Yet you then support the consequences those buyers have to go through due to becoming over-indebted in the short term. Quite a confliction of principles you have there Tim.
So what we get from you is a mishmash of misleading and deceptive comments,
That would rank as one of THE most hypocritical statements I've seen here yet. Snake in the grass indeed.
Snow,
Thank you for highlighting that behaviour.
That advice in Nov 2021 has caused overleveraged buyers of that period cashflow stress and mental stress, as well as changing their future financial trajectory and potential future financial security. Unfortunately some may choose to self harm and the loved ones affected will have a future without their cherished family member.
Informing potential buyers of the elevated house price risks and being aware of potential unintended consequences outlined above, this was the main motivation of many commenters on interest.co.nz, despite the repeated attempts by those with their vested financial self interests to discredit those commenters.
Meanwhile those with their vested financial self interests may have received their sales commission on the transaction and have moved onto the next transaction.
The lesson .. which is especially important in these says of scams and asset bubbles.. is that it is more important than ever for individuals to research how markets (incl real estate) work, economic cycles, inflation, historical interest rates and debt.
And that means personal research , talking to lots of people over a long period of time and so on.
The tendency these days to blame RE agents, banks, RBNZ Governments. Anyone but themselves.
Everyone has a bias and an angle.. part of the game of life is to understand this and act accordingly.
Sometimes there is an issue but the majority of the time the key is to stop thinking like a victim and take personal accountability very seriously. Those that do tend to get very wealthy without undue risk
Negative for you, positive for me.
I can bet it's Yvil, in one of his many fakes
Nah, Yvil is a smart cookie, these comments are blunt as
Given the name and style, it's an account infected with ToThePointis
And just like that HO thinks danicriss is another of my many many accounts, LOL. Thanks BTW for the "smart cookie" and nice reference to TTP.
Noone thinks TTP is smart, apart from you
Who is "Noone"?
Has anyone ever come across her/him??
TTP
Fraud.
You seem quite disgruntled yourself... is it because the housing market is collapsing?
In reply to the bit about insurance increase and rates, (approx $750 per property) so that is $15 per week increase in rent and rounded up to $20, easy economics you know. And the furtherest thought on my mind is to exit, infact, I would like to add.
Then don’t sell, add. Fill your boots. You don’t need our approval.
Post the address here so that we can check in in a few years and congratulate you. /sarc
A worker has to earn 25 dollars per hour gross income to pay a median rent. The minimum wage is 23 dollars per hour
This is nuts
Yes it is. But it is going to get worse with current immigration rate. The "rental crisis" will be a feature of the next election.
The dumbass guvna is exascerbating the rental crisis IMO
While he justifies a high OCR because of rising rents fueled by rising demand. A very very circular argument. Unemployed people NEED a home too
Its safer to lower the OCR a little and watch for the results. He still has the OCR stick to wave if inflation looks like going the wrong way
Your argument: lower OCR so more renters but houses, because houses are not captured in CPI while rents are. So we can all live happily in the last decade of ever inflating asset prices
You know what's dumber than rents fuelling inflation keeping OCR high keeping houses unaffordable for renters going back full circle? You guessed it, taking house prices out of inflation calculation for no reason, followed by our "bring'em all in" immigration policy of the past 12+ years
On the money! Lowering the OCR will lower rent inflation.
Better yet, crush the commodification of property into the dirt so more buy rather than rent from some over leveraged “businessman”
Id say we’re on the right track needed to remove the cancer, whether we want it or not, inflation will force the RBNZ’s hand.
🍿
Yes.
We need landlords but property investment shouldn't be our primary means of making money. It's not exactly something to be proud of.
There are some very smart kids in NZ .. I hope this crash helps the next generations avoid RE and become real entrepreneur's... we need engineers, chemists, teachers, surgeons, agritech pioneers and scientists.. then we can build a proper economy.
What is the median hourly income to compare against the median rent?
https://www.stats.govt.nz/information-releases/labour-market-statistics…
Used to be done annually (HLFS) but not sure whether we can expect an update for the period June 2023 to June 2024.
By my brief calculations, for prices to nominally fall to 2014 levels by end of 2025 they will need to fall 60%. That's an average fall of 10% per quarter. That's a big call. Especially in an inflationary environment.
I respect you for quantifying your prediction on this forum, but I just can't see it. I picked flat prices at the start of the year but ill put my hand up and say I may be off by about 5%, depending on the region. But a 60% fall is apocalyptic.
Baptist, yes your calculations were brief - in fact they were too brief. Read my comment again. If by the end of 2025, prices did trend down to levels they were 10 years earlier, then they would be where they were at the end of 2015 - right?
Apocalyptic, well, that's your convenient sensationalism of my post. Be reminded, they did indeed fall -40% in the 70s. I'm sure such a prior forecast might have been labelled "apocalyptic by the vested then too.
https://www.greaterauckland.org.nz/2016/07/11/remember-the-last-time-ho…
Only a complete fool would rule it out happening again....
"Be reminded, they did indeed fall -40% in the 70s. "
Note that the above is in inflation adjusted terms
Here are the current inflation adjusted price changes from the peak
1) Wellington: -33%
2) Auckland: -31%
3) Palmerston North: -28%
4) Napier: -28%
5) Rotorua: -27%
6) Hamilton: -25%
CN, the following graph shows the inflation adjusted historic prices.
https://www.globalpropertyguide.com/pacific/new-zealand/home-price-tren…
Once the COVID 2.5% mortgage price froth is removed, I think it's entirely possible that we could revisit Dec-2015 pricing levels. Risk free TD's are forecast to remain high so it would certainly put a sustainable floor under house prices for reason of higher risk rental yield alone. For FHB's there is certainly no need to rush. From about now, have those lowball offers at the ready as you might be surprised by how much more desperate vendors have become and want out of the game.
Someone is bound to be along shortly to argue "but wages have increased"! Yes, and so has food, rates, insurance and petrol. It's called a "cost of living crisis" for a reason.
Thanks to you both for the excellent links.
I wonder if there is an data on inflation adjusted rent prices?
If so, that would be great.
RP,
Land, and property that it sits on it, is indeed "notoriously illiquid". And illiquid assets should only be bought for longer terms, 5+ years, 10+ being better. The idea being that you never have to sell them unless you are facing financial ruin. A well managed portfolio must contain numerous asset classes with various levels of liquidity. Consequently, methinks your ire should be directed at the foolishness of those people that have all their portfolio in a single asset class and are being forced to sell ... Are there many of those? I suspect not. Paper losses in illiquid assets are just that: not real losses until they get turned into a smaller pile of cash. Time, inflation and slowly rising wages will ensure most people will be fine. (But CN is right. Timing your purchasing helps enormously. But sometime it's not always possible.)
There’s definitely room for prices to go down, and more steeply in certain areas most impacted by extreme weather/flooding. The incoming DTIs will create a ceiling too, I think with all the talk about whether or not interest rates are going up or down, people forget all about this. Interesting times ahead.
Really good point. Globally with the changes to the economy, wars and so on climate change and its effects seem largely forgotten.
In the medium to long term it will be the climate as much as interest rates that affect property prices.
Many FHBs want to get in, I see a comment of a FHB that bought and commentators here congratulating them, the same commentators that say don't buy now, wait. The thing is, as soon as they are in their own home, generally the cost of living goes down, it tires me hearing these commentators going don't buy now, wait. You would think these people have a vested interest in the rental market. I have rentals, but I still champion people when they get into their first home.
I see a comment of a FHB that bought and commentators here congratulating them
For context, I assume you are talking about the commenter that claimed to have bought after finding a suitable property at 10% below its 2017 CV? If so, how do you view this in light of your response to the earlier comment in this thread that "come end of 2025, prices are back to where they were 10 years earlier"?
Hi Mypointis, can you please unpack the claim you've made here:
"as soon as they are in their own home, generally the cost of living goes down"
not with mortgege rates at 7%
It's pretty simple, once you struggle for a few years to save a deposit to buy a home, you have no spare cash, buy less avocados and 2nd hand iphones. You spend less therefore your cost (quality) of living (life) goes down (the shitter).
Sure, most people want to own a house at some point. And there’s always people buying at any given time. But the insane FOMO culture we’ve developed around RE is starting to wear off, and FHBs see it for the falling knife it is. The sideline is pretty nice right now.
IMHO the RBNZ is helping property owners right now.
In the same way that power companies make profits, they dam up the flow. Then there is RISING demand from end users who NEED power for everything from shavers to electric cars
FHB are being squeezed between higher rents and high test interest rates and are stuck. They NEED a home. Meanwhile the demand to buy a house keeps rising until the day they all can..
What do you think will happen then ⬆️ If I was the RB guvna earning BIG bucks I would lower the OCR a little and monitor the effects
Rising mortgage costs far outweigh the rising rental costs for a FHB.
A little OCR cut isn't going to change this, it needs a rather large OCR cut to balance the maths at current prices.
What you think will happen is based on hope and imaginary scenarios. It's lacking facts to form a valid "honest opinion"
A few here think if the guvna eases his foot OFF THE BRAKE while the nz economy carcass is still twitching and not quite dead, then house prices will be OFF TO THE RACES
Apology for three metaphors in one comment, but I don't think the guvna cares excessively about house prices as he is principally concerned with inflation.
You’re forgetting about pent up supply, growing by the week. Lots of people also need to sell….
Tell that to the FHBers who are experiencing incredible financial stress at the moment as their interest rates move to current market rates. On top of that all the inflation on food, power, rates , insurance etc etc. Some are selling, some the Banks are selling and off to Australia they go. You say you have rentals so you are older, established and have had the benefit of past housing inflation. It’s easy for you to encourage FHBers to take on debt at the level needed to buy their first home. In the last three years people have listened to people of your generation and have come a cropper.
In regards to the ponzi, my view is that record migration levels initiated by the business lobby were the final efforts at kicking the can further down the road.
I cannot see any further ways to make prices rise over the next few years.
If employment is the main driver of immigration, then NZ is facing lower rates in future due to rising unemployment and a recession.
It’s been eloquently argued that we’re heading into a deepening recession by others on this forum. (Shout out to Independent Observer too, who unfortunately hasn’t been active in a while.)
This too is factor - arguably, the price drops have only begun. A recession can cause property prices to further accelerate compared to when economic times are good. This could play out over years.
I will add that I think it is a scandal that we as a society have created a situation that is less conducive to young people thriving. Any wonder they’re leaving in record numbers.
Shelter is a basic human need. When humans struggle to fulfil those basic needs, they are far less likely to reach their full potential, create and innovate.
How many Lavoisiers and Einsteins exist in this country but will never realise their full potential due to the drudgery of desperately trying to acquire basic needs?
The negativity is painful to read, your life is only going to be as good as your outlook. I know plenty of young people with a positive outlook that are out there getting where they want to be earning good money in productive jobs. And yes, in their own house in their (early) 20s.
Change, though often painful, can also be necessary and good. What you characterise as negativity isn't necessarily so. I, for one, think that continuing the trend of the past few decades would be a negative outcome and welcome change at this point - despite the difficulty that comes with it.
When I think about where I would like NZ to be in 10-20 years time (innovative, socially harmonious, productive, and affluent), the current turmoil - at least as far as the property market is concerned - is an unavoidable and necessary step along the way.
My outlook is positive.
My thoughts exactly. For NZ to move forward we’ve got to realign property prices and change the mindset around property market. A “recovering” market should mean one where prices are falling back to affordable levels, not the opposite. Capital should be primarily invested in new or productive businesses. Buying and selling the same houses at increasing prices achieves nothing but higher bank profits, which head overseas - along with our smart kids who can’t afford a basic need. Why do so many not get this?
Why...the pull of tax free levered greed is strong.
I get your point. Sometimes one shouldn’t be concerned about the world and instead cultivate one’s own garden. But I disagree in part with you as with Voltaire.
You stated, “Your life is only going to be as good as your outlook.”
Try telling that to a young person growing up in Somalia or Afghanistan. Obviously there a scale and we in New Zealand are very far from there.
But the evident decline over time in our institutions and opportunities for young people in our country must be discussed in my view.
What negativity?
The main issue in New Zealand over the last couple of decades has been overinflated house prices. The bubble is bursting. This is super positive for the country. It seems to me like you're the one bringing doom and gloom to discussion.
Here’s an idea. If you find the content on this forum painful to read, read something else. People come on here to discuss their ideas, don’t beat yourself up if they differ so greatly from yours, they are just opinions.
It’s not a ponzi; it’s a cartel. The problem has always just been land use and building restrictions. A decade of cheap money and growing population within the confines of these restrictions was always going to pump up prices.
But it’s done. Population is declining, money won’t be cheap again for a long time, and there’s too much momentum behind the yimby movement (in either its left or right form) for these regulations to hold.
How are pundits, analysts, the media etc still talking about high single digit house price growth? Where are they seeing the fundamentals to drive this?
Spot on about the YIMBY movement. Their power will grow. And they will get increasingly grumpy about how NIMBYs have inflated dwelling prices for their own selfish benefit.
my view is that record migration levels initiated by the business lobby were the final efforts at kicking the can further down the road.
Absolutely agree. And just like the previous lot who were the kings of ‘unintended consequences’, this Govt could very well pay a heavy price for their short sighted, it worked before and it will work again outlook.
Thanks for the call out Sam. I’m still here from time to time but have been prioritising fly fishing and hiking over th summer months.
I think it’s worth noting that the yield curve inversion is now the longest since just prior to the 1930’s depression:
https://x.com/gameoftrades_/status/1787510315766448167?s=46&t=MUwQeKa7M…
The US stock market is highly concentrated in just a few stocks - to the same extreme as just prior to the Great Depression:
https://x.com/macroedgeres/status/1759690741108945141?s=46&t=MUwQeKa7Mk…
Add to this that the equity risk premium for the US sharemarket is now worse than 1929 - meaning it is as high risk as it gets for the possibility of no return or just getting completely wiped out:
https://x.com/hussmanjp/status/1756056142629720281?s=46&t=MUwQeKa7MkEJ7…
So if anyone is bullish in the current context, you would really need to sanity check (and bias check) their position.
My view remains that NZ property is overpriced even after the falls we have seen so far. And I remain committed to a view that 50% fall in real terms is quite possible ie we are only about halfway down to what could be a bottom (where asset values are supported by fundaments (that is productivity/cash flows/incomes). Remember we were told by vested interests that this would be completely impossible in NZ?
The coming recession and fall in interest rates may only increase the rate of house price falls as businesses fail/jobs are lost and people leave for greener pastures where incomes are higher and house prices are cheaper. Falling interest rates does not by default mean rising asset prices - at least in the short term. In the longer term yes.
IO
Thanks, finally something worth reading in the comments.
Many of us here are well aware of how the magnificent 7 have distorted equity indexes , how low the breadth is... its quite possibly the next show to drop. On a Global basis there is no one to co-ordinate any recovery... like during the GFC.
China is a complete mess, Europe on the brink of a bigger war, and the USA facing a choice between a diddering old fool, and an old crim who shags old porn stars...
Any one else think this sets us all up for failure ? No wonder people are buying gold here.
Yes see your ITG the mighty IO views, as spot on.
Sadly, many are completely blind to the actual goings on globally.
Just look at Gold/Silver.....I would normally be completely befuddled why Gold and Silver is rocketing away as it is.
New high after another for Gold. As is should be heading south and well down, as the US is holding the FED funds rate high, banks deposits earning good returns and the whole HFL paradigm.
The only answer is those in the know and then the savvy masses, not trusting Govts/Housing/Stocks, as a sure store of value.
Chinese mum and dad buying is notable.
These PMs don't have any counterparty risk and are transportable.
Good to hear from you IO. An informative post. I’ve always respected your posts and thanks to you and others here I feel a lot more confident continuing to navigate my financial future 👍
Stay well Interested_Observer
Anyone who heeded Interested_Observer's numerous warnings and avoided taking on excessive amounts of debt in the 2020-2022 period, would be thankful for Interested_Observer shining a light that those with their vested financial self interests did not want the potential buyers knowing.
Stay well Interested_Observer.... Interested Observer's ... be thankful for Interested_Observer
I'm not being facetious but is Interested_Observer related to Independent_Observer or something. Its just that they have the same last name
Thank you for highlighting my typo. Should be addressed to Independent_Observer.
Going...going...gone onto the market with a price 50k below auction reserve.
Based on the current conditions, it's more like 200k below
"Property Brokers general manager of property management David Faulkner said the only people who were going to sell a property at the moment were those who had to, including those who were struggling financially or who were going through a relationship break-up."
So the uptick in auction activity is what happens when more people are struggling financially and have to sell.
Just out of interest ... If you follow the process I outline in a post below ... Is my route to establishing a value higher or lower than you've offered?
I have successfully advised FHBs to not buy into the property rort since 2021.
Many questioned my wisdom then, but now thank me, seeing the financially existential Debt bomb they have avoided.
The dark forces of the REA PONZI, unfortunately, have sucked in many buyers, at income multiples past 5 or 6DTIs.
Such high DTIs are a very dangerious period to buy into and every such bubble busts, 100%.
No bubble can go on, gently fix itselt, they all bust spectaculary and leave lives, waste and wreckage in their wake
It's advice that has proven itself 100% - it's my good deed for society. The dark PONZI forces do wail and gnash their teeth at me, but they will have their comeuppance for their outright skulduggery over the last 10 years, of capturing and feeding lies to the buyers.
Buyers today should only offer what were the valuation range in the 2012- 2015 period, as this is, by any reasoned study, where the market is headed in the biggest property bust since the 1970s.
This current bust will far eclipse the 1970s, by a LARGE REAL % margin.
Hi Mp (or is at really Ashley Church?) But the kinder side of AC.
With respect, Oneroof does not produce any news!!
They only produce one-sided REA PONZI pumping propaganda!
Hitler and his right hand man Goebels, could learn a thing or two on propaganda from this devious lot.
I have studied and tracked the often false narratives, thoroughly bad advice and snake oil salesman tactics they employ, sadly sucking in some nice, gumby types, who are soon parted with their money, for no productive good.
MP, you seem to promote Onewoof like stories, do you work there? Or levered stressfully past your eyeballs??
High Debt, in this new world of high inflation and sustained high interest rates is not the place to be. Deleverage without delay is sage advice.
Debt, is in fact, stealing from your future self in a high interest rate world, as we will have, going forward.
The past, REA Industry model of loading up on Big DEBT, Died and was buried 20ft deep in 2021.
A new, better world has emerged, after its committal.
MP, what is your "positive" take on this Governments removal of the FHB's grant? Do you think FHB's welcomed this? Those who voted blue will be feeling betrayed - don't you think?
FHB's with growing deposits will no doubt be rejoicing at every headline that reports on continued house price falls.
Running around headless talking positive words is one thing, combined balanced thought and analysis is something else entirely. Without it, people a more likely to be suspicious of your motives and draw easy conclusions about where you're over invested.
The removal of the FHB grant will certainly have a lot of people thinking twice about National. People will see it as taking away grants to struggling FHB while giving wealthy property investors huge tax breaks.
Even if those tax breaks are a standard business practice, and Landlords are in "business", a lot of people don't see it that way and view everything emotionally.
The reality is that giving people subsidies to buy things or rent them just pushes up the price of them i.e. the taxpayer money ends up in the hands of the vendor or landlord.
But yes, I agree it was politically unsound to give back landlords (of old builds) interest deductibility at the same time.
If only they extended mortgage interest deductibility to owner occupiers.
"If only they extended mortgage interest deductibility to owner occupiers. "
How would the central government finance the resulting reduction in tax revenue?
In case you don't know, allowing mortgage interest deductibility for owner occupiers would reduce the tax revenue for the government via lower taxes on household incomes.
How would the central government finance the resulting reduction in tax revenue?
With a land value tax to make sure property prices come down and therefore the interest being claimed by owner occupiers was kept to a minimum.
Imagine a government that had a vested interest in keeping a lid on property prices!
…and if landlords are “in business” they should be taxed accordingly. Instead they want it both ways - deductibility of costs but no tax on profits. And the govt is giving them that…
What's your point? A handful of properties over $2mil sold? Doesn't make much of a point at all really.
A new lifestyle property on Miles Lane in Tauriko, which had an asking price of $2.48m, was also sold by Bayleys this month.
Doesn't say what it sold for though to give an indication on selling price vs asking price.
A five-bathroom, three-bedroom home on Moffat Road, which had an asking price of $2.5m, was one of several properties in Bethlehem to sell in the $2m-plus price bracket.
Same with this one. They won't say what they're sold for. So it's a meaningless statement designed to get people like you brimming with anticipation. Looks like it's working as well.
Straight from the article:
"However, he said it was too early to suggest a trend based on one strong month, especially when some of the sales had been in the pipeline for several months. Some of the buyers had first looked at the properties they eventually purchased before Christmas, he added."
Ps how long before Christmas could these go back I wonder?
OneRoof is not worthwhile quoting, Mypointis. Except a couple of days ago when OneRoof said the market was tanking, then every poster referred to it. Then it's fine to quote it.
Well I think it's because OneRoof are usually so bullish on property, to do an "about-face and post an article like that is what caught people's attention.
A bit like the moment when the band aboard the Titanic stopped playing.
The band is now in the icy waters
here is another
https://www.oneroof.co.nz/news/tony-alexander-in-the-most-dangerous-par…
The decline of sufficient cash flows for many businesses will initially be accepted as temporary. But as the owner trims costs, perhaps sells off assets to shore things up, there comes a point where it will be clear that continuation of the business is not possible.
The problem is that the owner is probably not going to acknowledge this situation until it is too late to save some capital, their home, their marriage and maybe their health. My recommendation thus becomes this:
For those of us who have been around for a while and seen the ups and downs, watched the rash purchases of golden Ford Rangers and seen the forcing of families to live with relatives, there is a duty. One of us needs to sidle up to our relative, friend, club mate running the business and say perhaps you need to call it quits. Not everyone wins every time and sometimes you’ve got to stop what you’re doing before things get legal at the behest of your bank, your creditors, or the IRD.
I’m no expert in behavioural economics. But I imagine that just as we are aware of the economic cycle, the housing cycle, and the credit cycle, there is probably something called the psychology cycle or a more appropriate term like that.
If there is, then we are entering the most dangerous part of it where many business owners will have to face the reality of their inadequate cash flow position. It seems better than those of us who’ve lived through cycles of the past and seen the damage choose to walk the path some now need to follow with them, rather than trying to pick up the pieces of what is left of their lives a year from now.
Pretty bleak words from old mate.
I might be able to buy a golden ranger off tuners at the bottom yet....
Be quick
The Comb has turned bearish because work and cashflow has collapsed for him
From his early May newsletter
On average their sentiment reading sits at 112. It hit 74 at the end of 2022 then recovered to 95 this February. It is now down at 82. People are scared and shocked into their shells.
I can attest to a version of this relevant to business sentiment from my own experiences. People have closed up shop. I have had an email address since sometime in the mid-1990s initially in the corporate sector and since late-2019 while running my own business.
I have never seen the email flow as low as it is now. People have stopped making enquiries about things. Requests for presentations have collapsed.
https://www.tonyalexander.nz/wp-content/uploads/Tonys-View-9-May-2024.p…
I wonder if the sheeple have finally stopped believing his forecasts - what a difference six months makes
https://www.oneroof.co.nz/news/tony-alexander-expect-10-house-price-gro…
"The Comb has turned bearish because work and cashflow has collapsed for him"
For many people, only when they experience it personally, is when they get a wake up call on reality.
In an economic downturn, when it happens to someone else, its a recession, when it happens to you, it's a depression
The pending economic depression calling in early into see old Tones the Comb, for a serious financial uppercut, could not happen to a better or more appropriate recipient.
He drove this car at speed, into the concrete block.
He has been a leading proponent and enabler for inflating this disastrous housing Ponzi Balloon, to the dizzying height that topped out bigtime 2021.
Glad to see a reversion to the average pre-2012 chart, coming back and then only inflating at the 2% to 3 % or as per the average wages rises.
New Zealand Residential Average Sale Price (tradingeconomics.com)
I have been to way to many corporate events where The Comb has been wheeled out as guest speaker to spruik about how;
- Property cannot fall in NZ
- Demand is stronger then supply
- OCR will be cut soon
- They are not making any more
- and on and on
So few in the audience feel they can question or challenge him at question time, after all he is so confident ex BNZ head economist and an expert in the field of Spruiking....
Tony is a one trick pony, and the pony show is over.....
That pent up demand that he kept referring to which would support house prices is not there at current house price levels in some markets.
In Dec 2021, he gave 19 reasons why house prices would not crash in NZ. He couldn't see the largest housing bubble in NZ when house values peaked at $1.76 TRILLION. Was that due to the vested financial self interests which potentially tainted his perspective or did he genuinely miss seeing the key warning signs? Should we attribute Hanlon's Razor here?
https://ndhadeliver.natlib.govt.nz/delivery/DeliveryManagerServlet?dps_…
Given their reports and tweets, Jenee Tibshraeny & David Chaston saw the elevated house price risks at the time.
Now tony is just a trick 🤣
Yes, that's the article I was referring to. After rubbishing OneRoof for months and months, all of a sudden every DGM commenter posted about this article, because it's saying what they want to hear. Next time OneRoof mentions about house values not dropping, it won't be worth listening to, anymore... Talk about narrow-minded, one eyed bias. LOL
It's quoted because they finally mention what's been so bleeding obvious to a lot of people for quite some time Yves. The sentiment towards OneRoof hasn't changed. It's pretty simple to understand.
Talk about narrow-minded, one eyed bias. LOL
People with integrity do not rubbish a certain type of media, then suddenly change their minds when that media says something they like to hear. Have some integrity.
Hahaha what a load of rubbish Yves. No one's suddenly changed their minds and thinks OneRoof has integrity. That's most likely why its being quoted in the first place. To laugh at them. Certainly not a company that needs to be defended anyway so relax and enjoy the rest of the weekend.
You bang on about negativity as if rising house prices are a positive for our country...as such i can only conclude you are Tim & TA's love child.
Buyers today should only offer what were the valuation range in the 2012- 2015 period, as this is, by any reasoned study, where the market is headed in the biggest property bust since the 1970s.
Two years ago I would have thought this unlikely but possible (was expecting to see falls up to 40% in real terms). Since then though, the outcome you describe has only become more likely - to the point that I now think it is more likely than not.
I do find it fascinating that so many commenters here don't seem to look at these risks objectively and adjust their strategies accordingly. Instead choosing to ignore the risks and argue vehemently against them. It seems that in many cases their only reason is that they don't want it to happen.
I note a significant change in Rodney district over the last number of weeks. Obviously based on a small sample of auction results but they are significantly down on numbers selling and prices achieved vs cv. Historically Rodney district has held up well against the current market conditions! Interesting one to watch.
Yeah Bigtam, always been a flow from inner city towards lifestyle but they cannot sell there Devonport houses for enough to meet Dairy Flat ask right now, the tide is dropping for all..... market always does this just before a leg down, which is going to need to be at least another 10% to get bidders bidding.
"I do find it fascinating that so many commenters here don't seem to look at these risks objectively and adjust their strategies accordingly. Instead choosing to ignore the risks and argue vehemently against them. It seems that in many cases their only reason is that they don't want it to happen."
Those are real life examples of cognitive dissonance.
Buyers today should only offer what were the valuation range in the 2012- 2015 period
It's a very interesting bit of advice - unfortunately interest.co.nz charts for median house price only go back as far as 2017;
https://www.interest.co.nz/charts/real-estate/median-price-reinz
But the up and up is clearly visible even in that shorter timeframe.
I suspect house prices/lending criteria in 2015 more clearly resembled price-to-income ratio of less than or up to about 5:1 - and even that is considered only marginally affordable on that matrix.
Hi Kate, the Trading Ecomonics site, has a great deal of relevant stats, for those that care to look.
As you can see, long term, the over financialisation of the NZ housing market become a significant social problem within NZ from 2012.
New Zealand Residential Average Sale Price (tradingeconomics.com)
So when this is considered and coupled with our generally low wage growth, a reversion to the pre 2012 Trend for the New Zealand Residential Average Sale Price, lands us pretty much, at an average NZ house sale price of 500k in 2024.
I believe it's the floor price we are heading to.
"unfortunately interest.co.nz charts for median house price only go back as far as 2017"
Go look at the chart on a laptop or desktop computer. The chart can be expanded and goes back to 1992.
"Buyers today should only offer what were the valuation range in the 2012- 2015 period..."
This may be good advice - but not that helpful on a property by property basis (and the CVs are not done property by property!)
I'd suggest looking up the last sale value and year on one of the property web sites.
Enter this amount into a calculator. Then multiply by (say) 1.045 (4.5%). Then press the "=" sign on the calculator counting from the year after the last sale year until you get to 2024.
And - hey presto - you've applied a per annum rate of return of 4.5%. This may be a reasonable 'first offer' price.
But the job's not done. Major reno? The price goes up. Recent refresh? No change. Large chunk of land? The price goes up. Can you trust the last sale price? Go back to an earlier one and re-check as per above. Something changed in the local environment from the last sale date, e.g. new roads, shopping centres, etc? More price adjustments.
Still keen? Buy the property file from council. Check build quality, flood risks, geo-technicals, etc. (Most people will need help with this. Most experienced builders and architects can help here. Time to make some new friends?) Any red flags? Walk away or mark the price down accordingly.
BTW - I used a 4.5% gross annual return on investment. That number will be too high for some areas and too low for others. To understand what is a better figure ... You'll need to find a sample of recently sold and similar properties in the same area and do the calculator thing for those properties. (Best done in a spreadsheet.)
Oh ... And this process doesn't really work for apartments. (They need a different approach and the maths is more complicated.)
I get where you are coming from, however if the year in which the last sale occurred is 2020, 2021, 2022 or 2023; I don't think that formula works for most dwellings (appreciate that upgrades, such as double-glazing or the addition of rooms/garage etc. - make a big difference) - and especially not for FHBs who haven't had the benefit of tax free capital gains on any prior property ownership.
As this chart suggests, the price rises started to take off in 2020 - with that peak in Q4 2021 in most markets. They are just now starting to correct;
https://www.interest.co.nz/charts/real-estate/median-price-reinz
I think it was reported a couple of days ago that 7% of all sales (not sure whether that was nationwide or AKL only) were selling at a loss on their last sale price.
Best buying to my mind is to look for a place that has a last sale before 2020. As those are the owners that are more likely to meet the market today, as they will not have lost capital on their investment (i.e. their last purchase price). Those that have to take a capital loss - I feel really bad for and I can fully understand their reluctance/desire to wait it out until market values bounce back or their debt burden is inflated away.
I'm not saying my advice is correct/right in all cases, just a different perspective for consideration (especially for FHBs).
"however if the year in which the last sale occurred is 2020, 2021, 2022 or 2023; I don't think that formula works for most dwellings"
Surprisingly, it still does. Yes there are a small number taking losses from sales in this period but most are coming out okay on a nominal basis (which is what the mortgage is measured in), usually between 2% and 4% on a gross annual ror basis.
Remember too, these are actual auction sales and not those that may be sitting on paper losses. (The later group is actually not as large as people's imaginations would like you to believe.) I keep track of passed in properties on which bids were made. These are interesting. Many are getting positive % on a gross annual ror basis. And some - without any signs of upgrades or renos - get in excess of 6% and still pass in. Usually reasons can be identified for this, and like I say, unless you have some approach that works on a property by property basis, establishing a value for a single property means your accuracy will be low.
"Best buying to my mind is to look for a place that has a last sale before 2020."
Indeed. Which is why my approach works as it goes back to last sale date (and even sales before that date) rather than vague and unspecific average valuations that are largely meaningless on a property by property basis.
Auctions are great when it's all unicorns and bollinger darling. It is clearly not that now. Why people still let themselves get sucked into paying for one baffles me.
Return to mean is underway.
30% walk away with an unconditional sale Averageman, sure its not going to get competitive bidding, but many houses come with LIM issues (non conscented work) just look at your average Ponsonby villa etc...
I see it as a valid way of quickly selling, but doubt its going to get you above market money like a price by negotiation might.
Maybe many of these are a little bit distressed right now
Firstly the Hurricanes won. The Chiefs Lost. And the referees whistle got an honourable mention....
The main point
While interest rates are so high, its just cheaper to rent... Rates are not going to be lowered until the economy destroys all future possibility of Inflation returning to 3's (see mandate below)
To keep inflation low and stable, the Government has set us an inflation target of keeping inflation between 1% and 3% over the medium term, with a focus on keeping future inflation near the 2% midpoint.
The RBNZ is determined to achieve its only mandate now that employment has been removed and references to big trees have been quietly dropped.
Everyone, there are a few Spruikers on here not getting it, even the PROFESSIONAL Spruikers like TA now get it. This is not a small pullback, this is going to be a full blown recession with people loosing homes businesses and families splitting etc.
They all hoped this would do (19-20% off in AKL and WGTN), but they now get its going to be a much bigger pullback, and its likely to spread to the regions. What we say on here has no impact on the market and is definitely not reported, what someone like TA says does have impact.
Agreed. Let's also not lose sight of the fact that spruik land wants inflation. It is the engine that fuels tax free capital gain. Specuvestment profits from inflation burning down the rest of society and avoids paying tax to boot.
Were taxing the wrong thing....?
The cost of grocery items are now 300 percent of what they were in 1994. Supposedly the last 30 years had no inflation.
That is affecting everyone including the poor too
I see the recent drop in the BOP council RV's now has every property down here selling over the new RV.
Do you mean Tauranga District? I saw that - they revalued after 2, not 3 years (3 being the norm). From the earlier July 2021 valuation to a revaluation in May 2023. And of course, there were some massive drops.
I wonder why they did that?
It was done at 3 years, their excuse it was delayed by Covid. Wouldn't say massive drops just 4% in my area, was the least affected in the whole of Tauranga. Valuations still above RV so not surprised its 100% and probably only the better houses that are worth the money are actually selling.
Tauranga is an attractive market for cashed up retirees so would be less impacted by credit restrictions impacting FHB’s than other regions of the market.
Yeah there is a lot of cashed up elderly people down here with massive amounts of disposable income each week. The restaurants and cafes are not short of patronage in the CBD. Still no shortage of people at the bottom end down here however, really its just like a condensed Auckland with a better lifestyle.
How do you find the traffic these days. We lived there for a year in the early 2000s but found the traffic way back then a nightmare :-). Mind you, at the time it was the fastest growing (percent-wise) population NZ-wide - followed by Kapiti and Q'town if I recall correctly.
Of course a whole lot of road improvements have happened since then - but whenever we've gone back it seems the expenditure hasn't improved the situation - in fact it seems worse.
I don't work so I'm not in the traffic at peak times. Traffic down here is like Auckland was 30 years ago, sure its busy in the peaks but out of the peaks and in the weekends its not like Auckland which is now gridlock all day long and all weekend. Auckland is a nightmare now, the motorways are gridlocked and there is almost an accident guaranteed in the weekends that see it grind to a halt, I would know I lived there only a few years ago and trying to travel from the North Shore out to south Auckland was a total joke. I can get pretty much anywhere down here outside peak traffic or anytime during the weekend in 20 minutes.
13 properties out of 256 offered at auction selling over CV in Auckland, approx. 5%.
You have to wonder if the downturn in Auckland will spread to the South Island. Seems a bit mad that the Central Otago region just sails on through this. Perhaps it’s like musical chair and they are all still dancing around.
Good question. Lots of Aussie and overseas money in that region so it's definitely not a normal market. A contacts brother owns a house there while living overseas in a low tax environment. Only there 1-2 weeks a year. Also paid millions for the vacant section next door to stop anyone building there.
Foreign capital effect. Will need regulation like Aspen.
Yeah, we absolutely have a housing utilisation issue which has been helped by property ever increasing.
It would be good to take some lessons from Victoria too.
I see troublesome R-P is in the middle of another melee
Judging by the number (and tone) of the comments here today, there's still a ferocious level of interest in New Zealand's housing market.
Seems that nearly everyone wants to buy a house - or an extra one.
TTP
Nah…was poking around a few weeks ago. Most vendors still asking crazy dollars and very soon the constipated market will be driven by those who actually need a sale. The effect could be like an overdose of epsom salt.
I am happy to buy a couple at the right price, but we are not there yet.... not by a long shot.
Why in the world would properties being auctioned be increasing in volume at such a rapid rate?
I get why people auction in a 'hot' market where there are multiple bidders; but what are REAs selling the auction method on in such a slow market?
What are the advantages of auction over fixed price listing in this type of marekt?
Anyone? As I'm miffed.
Kate my thoughts would be that they are people requiring a quick cash sale… people who really need to sell. No auctions at all in our area usually ( Wairarapa), but the odd one is popping up now, looks to be vendors that need a quick sale. I don’t know why vendors would choose auction as a method, seems to suit agents rather than buyers or sellers.
Here’s an example, bought 18 months ago. Now mid renovation and being resold by auctioned.
https://www.realestate.co.nz/42565693/residential/sale/432-masterton-st…
Yes, bought well under RV at the time and likely thinking/costing the reno required to a level that would mean not over-capitalizing on the property (based on the then current RV). Then the new RV comes out mid-reno and it's lower than their previous purchase price.
That's so very hard. But that's the nature of the market we are in.
As I mentioned earlier, the Helen Clark Foundation foresaw this happening and suggested a government bank be set up for FHBs who went in with low equity loans and have found themselves trapped by the underwater scenario.
For those who didn't notice:
CV fell 15% in 2023 from 2020
2020 CV: 915,000
2023 CV: 780,000
Fully expect the new Auckland CVs to drop between -10% and -25% in coming months and this will be the next major shoe to drop (after the July brightline flipperfest and another 2024 OCR hike possibility) - in the realization of prices heading back downslope to the much lower property trendline, that completely detached from all reality in 2012.
Over the last 30 years, average incomes have increased between 2% and 3%, (most commonly around 2% wage inflation) with NZ housing inflation having eclipsed this income growth, by eyewatering amounts into the mother of Boom of all Booms.
New Zealand Wage Growth (tradingeconomics.com)
A massive Bust (as we are 100% certainly now early into) was a certainty, just when, was the variable. No more wondering, it is now and it's a dropping, hungry hydroslide crocodile.
Wellington is revalued this year as well (previous rating valuations were done 1 September 2021).
I'm picking they won't be too far above 2018 valuations. Call it a 25-30% drop.
Inevitably there will be a slew of outraged comments on MSM about council rates not dropping accordingly.
Yes, sadly, NZs general financial illiteracy, will have the stupid howls of (why rates go up!!) protest and expect our dumb media to give it oxygen.
The REA INDUSTRY and overleveraged debt monkeys will hate the comming devaluations being set in quick dry concrete.......this Crashing market is still midstream.
While my CV is set to drop around -20%, I fully expect around a +10% rating increase.
Perhaps it should be, but I don't see how it will be.
I think there has been much lower turnover from 2023 onwards, such that I don't see their algorithm discounting the near-term, post-peak months and weighting the more recent sales more heavily. You'd only get the 25% to 30% drop if you do that.
The graph explains it a bit better than me :-);
https://www.interest.co.nz/charts/real-estate/median-price-reinz
But, we shall see!
The houses around me mostly have a CV of $1.3m to $1.6m. Few have been selling for more than a $1.0.
I predict there will be lots of objections to new CVs. It's actually a very intensive process for council to do it every three years. Maybe time to consider stopping it.
They might delay the process if it gets too hard and there are other priorities.
The choice is the venders. And vendors hope two or more bidders will get carried away at the auction. This is still happening even now.
There have been quite a few auctions recently where the sales values seemed unreal. On contacting the agents for more info - they've confirmed that they believed the buyers got emotionally involved. Sometimes it is OOs who just can't let go. But there's been quite a few 'pissing contests' between developers too. FHBs usually know better (but the 'bank of mum and dad' may not if they're present.)
"What are the advantages of auction over fixed price listing in this type of marekt?"
For real estate agents:
- known timetable for potential sale (and potential commission income)
- marketing costs paid by vendors
For Vendor:
- known timetable for potential sale - good for time constrained vendors (e.g. relocation to Australia, pressures from lender, deceased estate sales by beneficiaries, etc)
- ability to sell on unconditional basis
Just out of interest - when a leased property is forcibly sold because the ground rent hasn't been paid - does this go down as 'mortgagee' sale? Likewise, when body corp fees aren't paid and the property is likewise forcibly sold. Anyone know? (At least one auction last week was in this category.)
I think it depends on the terms of the auction. For example, we once considered purchasing an apartment (deceased estate) where the body corp fees were in arrears (by 10s of 1000s). The terms of auction were that the new owners would be liable for those arrears. Hence you bid whatever you were bidding - but needed to factor in that on the fall of the hammer, the arrears were an additional cost (your liability).
In that case, it was the trustee of the estate selling the property - not the bank. So, not technically a mortgagee sale.
Is there a price crash coming?
Or is it just a 'correction?'
Same thing.
I'd say we've already had a crash (>15% downwards since 2021 peak - worse in some places than others), and now the correction (which will take a bit longer than the crash), will be another downwards leg to an equilibrium-type price being more in line with a 5:1 (median) house price to (median) household income ratio.
This does not apply to land with known (identified either by S72 notification on title, or by District Planning maps) hazards - that land will decrease much more significantly in price going forward as insurance (including EQC cover) may be unobtainable, and therefore preclude mortgages being taken out on those properties.
Based on the Stats 2023 HLFS, I estimate that median household income (from wages and salaries) will move up to marginally greater than $100,000 (within say, a 3-5 year period), therefore the median house price will be roughly $500,000 within that time period.
Just wild guesses - as the assumptions are a kind of 'all things being equal' one.
And this isn't necessarily the reality at the moment - things are in great flux (all kinds of things!).
Agree Kate and the 500k median price is correlated with the house price charted curve upto 2012, after which all hell broke loose, as delusional Tulips style pricing took hold.
North shore 43% above rv, AMAZING!
This means, good house in good location has it's own price list.
For those that say property prices are plunging, they should check out the Riverhead area. All new developments have sold out, and I made a point of stopping this afternoon and photographing the number of sold lots of a new development, which is off the plans. In other words, not even a spade has been in the ground yet.
Out of 10 lots, 6 have sold, and it's been on the market for a month.
So much for the great kiwi property crash.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.